2019 tax charge - consultation preparation

[webberg]

I think you'll be participating in a kangaroo consultation,

So the answer is we pack up and go home, leaving the doors to our bank accounts open for HMRC to raid at will?

I agree that the consultation may be nothing more than a box ticking exercise BUT short of getting elected and changing the law from within, what alternative is there?

Challenging the application of the new law can be done only post charge and I guarantee that non payment will come with stinging penalties and interest charges. Challenging a new tax charge is going to be difficult, i.e. expensive in itself.

Perhaps part of the answer is that present litigation should be stayed or stalled until we see what the 2019 rules look like?

[DonkeyRhubarb]

Suppose a taxpayer lodged an appeal, at the FTT, on the basis that the loans were not disguised remuneration.

Could Parliament still pass legislation that treated the loans as disguised remuneration, imposing a tax charge?

MPs might have an issue with essentially overriding the outcome of a pending court case.

[Delendog]

will 2019 legislation also require a change in the law to enable HMRC to open closed years where no correspondence exists from HMRC to individual tax payers?

[DonkeyRhubarb]

will 2019 legislation also require a change in the law to enable HMRC to open closed years where no correspondence exists from HMRC to individual tax payers?

No. All indications are that it won't matter if HMRC hasn't opened an enquiry. The charge applies to all outstanding loans.

[TheDandy]

So the answer is we pack up and go home, leaving the doors to our bank accounts open for HMRC to raid at will? Your words not mine.

I agree that the consultation may be nothing more than a box ticking exercise BUT short of getting elected and changing the law from within, what alternative is there? The same old issue IMO - how many will be standing and sufficiently united and sufficiently financed to fight it. Alternatives have already been mentioned.

Challenging the application of the new law can be done only post charge and I guarantee that non payment will come with stinging penalties and interest charges. Challenging a new tax charge is going to be difficult, i.e. expensive in itself. Has Judicial Review written all over it, but I think the JR route will be a more common way of dealing with HMRC given their seemingly unfettered powers.

Perhaps part of the answer is that present litigation should be stayed or stalled until we see what the 2019 rules look like?

Maybe. IMO I think the proposal may cause more issues than it solves. May turn out to be a paper tiger.

[Delendog]

No. All indications are that it won't matter if HMRC hasn't opened an enquiry. The charge applies to all outstanding loans.

But if it is non-dotas then HMRC will not even know there are loans....

[DonkeyRhubarb]

But if it is non-dotas then HMRC will not even know there are loans....

True, they've got to find you first. Having said that, most pre-2011 schemes (Edge, Sanzar, AML, Cascade etc) were DOTAS.

In fact, it wouldn't surprise me if HMRC link the 2019 charge to DOTAS ie.

The charge can be levied where
(1) the scheme was a DOTAS scheme
and
(2) the taxpayer still has outstanding loans

[webberg]

Maybe. IMO I think the proposal may cause more issues than it solves. May turn out to be a paper tiger.

I think the point is to ensure that those issues become so complex and perhaps controversial that the whole thing gets dropped.

I've said before and will again, Judicial Review in tax matters is a big gamble. HMRC win the vast majority of these cases and I shudder to think how much has been spent in legal fees on them.

[webberg]

But if it is non-dotas then HMRC will not even know there are loans....

I can see a letter from HMRC to ANYBODY who has used a scheme at any time, saying tell me about your loans under pain of investigation and penalty.

I can see Sch 36 notices to promoters and advisers of promoters asking for names and details.

I think if you are "missed" you will be in a small minority.

[webberg]

True, they've got to find you first. Having said that, most pre-2011 schemes (Edge, Sanzar, AML, Cascade etc) were DOTAS.

In fact, it wouldn't surprise me if HMRC link the 2019 charge to DOTAS ie.

The charge can be levied where
(1) the scheme was a DOTAS scheme
and
(2) the taxpayer still has outstanding loans

The Technical Note, says all "disguised remuneration" schemes. There is no DOTAS link and my opinion is that HMRC consider that DOTAS is not a reliable measure any more and there will be no link.